The State of Georgia by this motion for leave to file a bill of complaint
Georgia sues in four capacities, only two of which we need mention: (1) in her capacity as a quasi-sovereign or as agent and protector of her people against a continuing wrong done to them; and (2) in her capacity as a proprietor to redress wrongs suffered by the State as the owner of a railroad and as the owner and operator of various institutions of the State.
The essence of the complaint is a charge of a conspiracy among the defendants in restraint of trade and commerce among the States. It alleges that they have fixed arbitrary and noncompetitive rates and charges for transportation of freight by railroad to and from Georgia so as to prefer the ports of other States over the ports of Georgia. It charges that some sixty rate bureaus, committees, conferences, associations and other private rate-fixing agencies have been utilized by defendants to fix these rates; that no road can change joint through rates without the approval of these private agencies; that this private rate-fixing machinery which is not sanctioned by the Interstate Commerce Act and which is prohibited by the anti-trust Acts has put the effective control of rates to
It is alleged that the rates as a result of the conspiracy are so fixed as
"(a) to deny to many of Georgia's products equal access with those of other States to the national market;
(b) to limit in a general way the Georgia economy to staple agricultural products, to restrict and curtail opportunity in manufacturing, shipping and commerce, and to prevent the full and complete utilization of the natural wealth of the State;
(c) to frustrate and counteract the measures taken by the State to promote a well-rounded agricultural program, encourage manufacture and shipping, provide full employment, and promote the general progress and welfare of its people; and
(d) to hold the Georgia economy in a state of arrested development."
The complaint alleges that the defendants are not citizens of Georgia; that Georgia is without remedy in her own courts, as the defendants are outside her jurisdiction; that she has no administrative remedy, the Interstate Commerce Commission having no power to afford
The prayer is for damages and for injunctive relief.
We will return later to the cause of action which Georgia seeks to allege. It is sufficient at this point to say that for purposes of this motion for leave to file we construe the allegation that defendants have conspired to fix the rates so as to "prefer" the ports of other States over the ports of Georgia as a charge that defendants have conspired to fix rates so as to discriminate against Georgia. And we construe the allegation that the southern defendants are dominated and coerced by the northern roads and cannot publish joint through rates when the northern roads refuse to join as a charge that the northern roads use coercion on the southern roads in the fixing of joint through rates.
Defendants in their returns pray that the motion for leave to file be denied on three grounds: (1) that the complaint presents no justiciable controversy; (2) that the complaint fails to state a cause of action; and (3) that two of the defendants are citizens of Georgia. Leave to file should of course be denied if it is plain that no relief may be granted in the exercise of the original jurisdiction of this Court. See Alabama v. Arizona, 291 U.S. 286, 291-292; Arizona v. California, 298 U.S. 558, 572.
Justiciable Controversy. It is said that the bill does not set forth a justiciable controversy within the rule of Massachusetts v. Mellon, 262 U.S. 447, and Florida v. Mellon, 273 U.S. 12. We take the other view, for we are of the opinion that Georgia as parens patriae and as proprietor of various institutions asserts a claim within judicial cognizance. The complaint of Georgia in those respects is not of a political or governmental character. There is involved no question of distribution of powers between the State and the national government as in Massachusetts v. Mellon and in Florida v. Mellon, supra. And, as we shall develop
It is of course true that Georgia does not have a right to invoke the original jurisdiction of the Court merely because there may be involved a judicial question. It is not enough that a State is plaintiff. The original jurisdiction is confined to civil suits where damage has been inflicted or is threatened, not to the enforcement of penal statutes of a State. Wisconsin v. Pelican Ins. Co., 127 U.S. 265, 297-300. And though the suit is civil, leave to file will be denied where it appears that the suit brought in the name of the State is in reality for the benefit of particular individuals. Oklahoma v. Atchison, T. & S.F.R. Co., 220 U.S. 277; Oklahoma v. Cook, 304 U.S. 387; Jones v. Bowles, 322 U.S. 707. Moreover, Massachusetts v. Mellon and Florida v. Mellon, supra, make plain that the United States, not the State, represents the citizens as parens patriae in their relations to the federal government.
The present controversy, however, does not fall within any of those categories. This is a civil, not a criminal, proceeding. Nor is this a situation where the United States rather than Georgia stands as parens patriae to the citizens of Georgia. This is not a suit like those in Massachusetts v. Mellon, and Florida v. Mellon, supra, where
In determining whether a State may invoke our original jurisdiction in a dispute which is justiciable (Oklahoma v. Cook, supra, p. 393) the interests of the State are not confined to those which are proprietary; they embrace the so-called "quasi-sovereign" interests which in the words of Georgia v. Tennessee Copper Co., 206 U.S. 230, 237,
"The attitude of the complainant States is not that of mere volunteers attempting to vindicate the freedom of interstate commerce or to redress purely private grievances. Each sues to protect a two-fold interest — one as the proprietor of various public institutions and schools whose supply of gas will be largely curtailed or cut off by the threatened interference with the interstate current, and the other as the representative of the consuming public whose supply will be similarly affected. Both interests are substantial and both are threatened with serious injury.
"Each State uses large amounts of the gas in her several institutions and schools, — the greater part in the discharge of duties which are relatively imperative. A break or cessation in the supply will embarrass her greatly in the discharge of those duties and expose thousands of dependents and school children to serious discomfort, if not more. To substitute another form of fuel will involve very large public expenditures.
"The private consumers in each State not only include most of the inhabitants of many urban communities but constitute a substantial portion of the State's population. Their health, comfort and welfare are seriously jeopardized by the threatened withdrawal of the gas from the interstate stream. This is a matter of grave public concern in which the State, as the representative of the public, has an interest apart from that of the individuals affected. It is not merely a remote or ethical interest but one which is immediate and recognized by law." 262 U.S. pp. 591-592.
If the allegations of the bill are taken as true, the economy of Georgia and the welfare of her citizens have seriously suffered as the result of this alleged conspiracy. Discriminatory rates are but one form of trade barriers. They may cause a blight no less serious than the spread of noxious gas over the land or the deposit of sewage in the streams. They may affect the prosperity and welfare of a State as profoundly as any diversion of waters from the rivers. They may stifle, impede, or cripple old industries and prevent the establishment of new ones. They may arrest the development of a State or put it at a decided disadvantage in competitive markets. Such a charge at least equals in gravity the one which Pennsylvania and Ohio had with West Virginia over the curtailment of the flow of natural gas from the West Virginia
Oklahoma v. Atchison, T. & S.F.R. Co., supra, is not opposed to this view. In that case, the defendant railroad company had obtained a grant from Congress to locate and maintain a railway line through the Indian Territory out of which the State of Oklahoma was later formed. The federal act provided certain maximum transportation rates which the company might charge. Oklahoma sued to cancel the grant, to have the property granted decreed to be in the State of Oklahoma as cestui que trust, to enjoin the defendant from operating a railroad in the State, and to enjoin pendente lite the exaction of greater rates than the maximum rates specified. The Court construed the Act of Congress as subjecting the rates to federal control until the territory became a part of a State, at which time the rates became subject to state control. The Court held that our original jurisdiction could not be invoked by a State merely because its citizens were injured. We adhere to that decision. It does not control the present one. This is no attempt to utilize our original
Since the claim which Georgia asserts as parens patriae as well as proprietor meets the standards of justiciability and since Georgia is a "person" entitled to enforce the civil sanctions of the anti-trust laws, the reasons which have been advanced for denying Georgia the opportunity to present her cause of action to this Court fail.
Cause of Action. It is argued that the complaint fails to state a cause of action. (1) It is pointed out that under the principle of the Abilene case no action for damages on the basis of unjust, unreasonable, or discriminatory railroad rates may be maintained without prior resort to the Interstate Commerce Commission. Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426; Great Northern R. Co. v. Merchants Elevator Co., 259 U.S. 285. (2) It is said that an injunction may not be granted to restrain rates alleged to be unreasonable or discriminatory where there has been no prior determination of the matter by the Commission and that the only way a State or any other person may obtain a judicial determination of the legality of a rate is by review of the Commission's order. Baltimore & Ohio R. Co. v. Pitcairn Coal Co., 215 U.S. 481; North Dakota v. Chicago & N.W.R. Co., 257 U.S. 485; Texas v. Interstate Commerce Commission, 258 U.S. 158. (3) It is said that damages under the anti-trust laws may not be recovered against railroad carriers though the rates approved by the Commission were fixed pursuant to a conspiracy. Keogh v. Chicago & N.W.R. Co., 260 U.S. 156. (4) It is said that persons other than the United States are barred from enjoining violations of the anti-trust
We think it is clear from the Keogh case alone that Georgia may not recover damages even if the conspiracy alleged were shown to exist. That was a suit for damages under § 7 of the Sherman Act. 26 Stat. 210. The Court recognized that although the rates fixed had been found reasonable and non-discriminatory by the Commission, the United States was not barred from enforcing the remedies of the Sherman Act. 260 U.S. pp. 161-162. It held, however, that for purposes of a suit for damages a rate was not necessarily illegal because it was the result of a conspiracy in restraint of trade. The legal rights of a shipper against a carrier in respect to a rate are to be measured by the published tariff. That rate until suspended or set aside was for all purposes the legal rate as between shipper and carrier and may not be varied or enlarged either by the contract or tort of the carrier. And it added: "This stringent rule prevails, because otherwise the paramount purpose of Congress — prevention of unjust discrimination — might be defeated. If a shipper could recover under § 7 of the Anti-Trust Act for damages resulting from the exaction of a rate higher than that which would otherwise have prevailed, the amount recovered might, like a rebate, operate to give him a preference over his trade competitors." 260 U.S. p. 163. The reasoning and precedent of that case apply with full force here. But it does not dispose of the main prayer of the bill, stressed at the argument, which asks for relief by way of injunction.
The relief which Georgia seeks is not a matter subject to the jurisdiction of the Commission. Georgia in this proceeding is not seeking an injunction against the continuance of any tariff; nor does she seek to have any tariff provision cancelled. She merely asks that the alleged rate-fixing combination and conspiracy among the defendant-carriers be enjoined. As we shall see, that is a matter over which the Commission has no jurisdiction. And an injunction designed to put an end to the conspiracy need not enjoin operation under established rates as would have been the case had an injunction issued in Central Transfer Co. v. Terminal R. Assn., supra.
It is pointed out, however, that under § 1 (4) of the Interstate Commerce Act (54 Stat. 900, 49 U.S.C. § 1 (4)) it is "the duty of every common carrier subject to this chapter to provide and furnish transportation upon reasonable request therefor, and to establish reasonable through routes with other such carriers, and just and reasonable rates, fares, charges, and classifications applicable thereto." And it is noted that agreement among carriers is provided in the establishment of joint rates. § 6. That is true. But it would be a perversion of those sections to hold that they legalize a rate-fixing combination of the character alleged to exist here. The collaboration contemplated in the fixing of through and joint rates is of a restrictive nature. We do not stop at this stage of the proceedings to delineate the legitimate area in which that collaboration may operate. In the Keogh case (260 U.S. 156) the suit was one for damages under the Sherman Act. The charge was that the defendant carriers
These considerations emphasize the irrelevancy to the present problem of the fact that the Commission has authority to remove discriminatory rates of the character alleged to exist here. Under § 3 (1) of the Act rates are declared unlawful which give "any undue or unreasonable preference or advantage" to any port, region, district, territory and the like. And the Commission has taken some action in that regard. See Alabama v. New York C.R. Co., 235 I.C.C. 255; 237 I.C.C. 515; Live Stock to and from the South, 253 I.C.C. 241. The present bill does not seek to have the Court act in the place of the Commission. It seeks to remove from the field of rate-making the influences of a combination which exceed the limits of the collaboration authorized for the fixing of joint through
What we have said disposes for the most part of the argument that recognized principles of equity prevent us from granting the relief which is asked. Sec. 16 of the Clayton Act provides for relief by injunction "when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity." Those requirements are sufficiently satisfied to justify a filing of this bill. It must be remembered that this is a suit to dissolve an illegal combination or to confine it to the legitimate area of collaboration. That relief cannot be obtained from the Commission for it has no supervisory authority over the combination. It is true that the injury to Georgia is not in the existence of the combination per se but in the rates which are fixed by the combination. The fact that the rates which have been fixed may or may not be held unlawful by the Commission is immaterial to the issue before us. The Keogh case indicates that even a combination to fix reasonable and non-discriminatory rates may be illegal. 260 U.S. p. 161. The reason is that the Interstate Commerce Act does not provide remedies for the correction of all the abuses of rate-making which might constitute violations of the anti-trust laws. Thus a "zone of reasonableness exists between maxima and
Moreover, the relief sought from this Court is not an uprooting of established rates. We are not asked for a decree which would be an idle gesture. We are not asked to enjoin what the Commission might later approve or condone. We are not asked to trench on the domain of the Commission; nor need any decree which may be ultimately entered in this cause have that effect. Georgia alleges, "No administrative proceeding directed against a particular schedule of rates would afford relief to the State of Georgia so long as the defendants remained free to promulgate rates by collusive agreement. Until the conspiracy is ended, the corrosion of new schedules, established by the collusive power of the defendant carriers acting in concert, would frustrate any action sought to be taken by administrative process to redress the grievances from which the State of Georgia suffers." Rate-making is a continuous process. Georgia is seeking a decree which will prevent in the future the kind of harmful conduct which has occurred in the past. Take the case of coercion. If it is shown that the alleged combination exists and uses coercion in the fixing of joint through rates, only an injunction aimed at future conduct of that character can give adequate relief. Indeed, so long as the collaboration which exists exceeds lawful limits and continues in operation, the only effective remedy lies in dissolving the
As we have said, we construe the bill to charge a conspiracy among defendants to use coercion in the fixing of rates and to discriminate against Georgia in the rates which are fixed. We hold that under that construction of the bill a cause of action under the anti-trust laws is alleged.
Alleged Misjoinder of Parties Defendant. Two of the defendant-corporations claim to be citizens of Georgia. Georgia asserts they are not. That issue is an involved one. Georgia may not of course invoke the original jurisdiction of the Court in a suit against one of her citizens. If either of the defendants who assert this defense is a citizen of Georgia and is a necessary party, leave to file would have to be denied. Pennsylvania v. Quicksilver Mining Co., 10 Wall. 553; California v. Southern Pacific Co., 157 U.S. 229; Minnesota v. Northern Securities Co., 184 U.S. 199; Louisiana v. Cummins, 314 U.S. 577. We do not, however, have to decide at this stage of the proceedings whether the corporations in question are citizens of Georgia within the meaning of Art. III, § 2 of the Constitution. They are not indispensable parties. In a suit to enjoin a conspiracy not all the conspirators are necessary parties defendant.
Exercise of Original Jurisdiction. It does not necessarily follow that this Court must exercise its original jurisdiction. It has at times been held that this Court is not the appropriate tribunal in which to maintain suits brought by a State.
By Clause 1 of § 2 of Article III of the Constitution, the judicial power of the United States extends "to all Cases, in Law and Equity, arising under . . . the Laws of the United States" and "to Controversies . . . between a State and Citizens of another State."
There is some suggestion that the issues tendered by the bill of complaint present questions which a district court is quite competent to decide. It is pointed out that the remedy is one normally pursued in the district courts whose facilities and prescribed judicial duties are better adapted to the extended trial of issues of fact than are those of this Court. And it is said that no reason appears why the present suit may not conveniently proceed in the district court of the proper venue or why the convenience of the parties and witnesses, as well as of the courts, would be better served by a trial before a master appointed by this Court than by a trial in a district court with the customary appellate review.
There is, however, a reason why we should not follow that procedure here though in other respects we assume it would be wholly appropriate. Sec. 16 of the Clayton Act (15 U.S.C. § 26), with the exceptions already noted, provides that "any person . .. shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws." Sec. 12 of the Clayton Act (15 U.S.C. § 22) provides that "Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the
From these provisions it is apparent that Georgia might sue the defendants only in the judicial district where they are inhabitants or where they may be found or transact business. The bill of complaint, however, alleges and (with the exception of the two defendants already mentioned) it is not denied that "the parties defendant are not citizens of Georgia, or within the jurisdiction of its courts." If that allegation is taken as true, it is apparent that Georgia could not find all of the defendants in one of the judicial districts of Georgia so as to maintain a suit of this character against all of them in a district court in Georgia. Certainly we have no basis for assuming that all of the so-called northern roads, incorporated in such States as Pennsylvania, Maryland, Indiana, Ohio, New York and Illinois, are doing business in Georgia. It is said that most of the defendants can be found in Georgia, in the District of Columbia, or in other districts. But no such facts appear in the record before us. And we cannot take judicial notice of the district or districts wherein all of the defendants are "found" or "transact business." We would not be warranted in depriving Georgia of the original jurisdiction of this Court merely because each of the defendants could be found in some judicial district. Unless it were clear that all of them could be found in some convenient forum we could not say that Georgia had a "proper and adequate remedy" apart from the original jurisdiction of this Court. Massachusetts v. Missouri, supra, p. 19. No such showing has been made. Once a state makes out a case which comes within our original jurisdiction, its right to come here is established. There is no requirement in the Constitution that it go further and show that no other forum is available to it.
It is true that § 5 of the Sherman Act empowers the court before whom proceedings under § 4 are pending to
"In a civil suit in personam jurisdiction over the defendant, as distinguished from venue, implies, among other things, either voluntary appearance by him or service of process upon him at a place where the officer serving it has authority to execute a writ of summons. Under the general provisions of law, a United States district court
It follows that we should not in the exercise of our discretion remit Georgia to the federal district courts for relief against the injuries of which she complains.
The motion for leave to file the amended bill of complaint is granted.
It is so ordered.
MR. CHIEF JUSTICE STONE, dissenting.
MR. JUSTICE ROBERTS, MR. JUSTICE FRANKFURTER, MR. JUSTICE JACKSON, and I think that the application of the State of Georgia for leave to file its amended bill of complaint in this Court should be denied (1) because in its judicial discretion, this Court should, without deciding the merits, leave the State to its remedy, if any, in the district court; (2) because the State lacks standing to present the only substantial issue in the case; and (3) because in the present posture of the case, the bill of complaint, for several reasons, fails to state a cause of action for which a court of equity can give effective relief.
As the Court concedes and for reasons which will presently be more fully considered, the State, under the rule laid down in Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156, cannot maintain its suit for damages resulting from the alleged conspiracy to fix unlawful interstate railroad freight rates. But the Court grants Georgia's application to file on the ground that its bill of complaint,
The Court disregards the fainthearted and unconvincing assertion of the State that it has a "common law" cause of action entitling it, independently of the Clayton Act and the federal antitrust laws, to maintain the present suit to restrain the alleged conspiracy to fix and maintain rates or charges for the interstate transportation of freight. We do not stop to consider this contention, for we are of the opinion that the objections to the maintenance of the present suit are essentially the same, whether it be regarded as a suit upon a cause of action arising under the Clayton Act or as one maintainable upon the equitable principles generally applicable in the federal courts independently of the Clayton Act.
I
If it be assumed that the State may maintain this action, either as parens patriae or for the injury to itself as a shipper and consignee of interstate freight, the right sought to be established is in point of substance like that of a private corporation, and the remedy asked is one normally pursued in district courts whose facilities and prescribed judicial duties are better adapted to the trial
It is said that Georgia should not be deprived of the jurisdiction of this Court unless it can bring suit against all the defendants in one convenient district; and that there is no reason for assuming that all the defendants are amenable to suit in any one judicial district. But this puts the shoe on the wrong foot. It is Georgia which seeks to invoke our equity jurisdiction to hear this case, and when the question of our discretionary power to remit the parties to an adequate remedy in some other court is raised, it is incumbent upon it to show that it will be unable to reach all the defendants in a convenient district. And Georgia, although invited on the argument of this motion to do so, has made no showing that the suit cannot be proceeded with in a district court as readily as in this
Further, it may be readily determined from standard works of reference, such as The Official Guide of the Railways, Moody's Steam Railroads, railroad timetables, and telephone directories, that the supposed difficulty is not a real one. Under § 12 of the Clayton Act, 15 U.S.C. § 22, these defendants may be sued in any district in which they are "found" or "transact business." A corporation both is "found" and "transacts business" in a district in which it operates a railroad or in which it maintains an office for the solicitation of freight or passenger traffic. See Eastman Kodak Co. v. Southern Photo Co., 273 U.S. 359, 370-374; United States v. Univis Lens Co., 316 U.S. 241, 246. These facts may be ascertained readily from the sources we have mentioned. It appears from them that there are several districts which would be as convenient for a trial as Washington, D.C., where proceedings before this Court would be had, and in which Georgia may obtain service of process upon at least as many of the defendants named in the complaint, as it may sue in this Court. For Georgia, itself, as well as this Court, seems reconciled to the suit's continuing here with but eighteen of the twenty defendants, since two may be required to be dismissed from the suit as citizens of Georgia.
II
If leave to file were denied, as we think it should be, without prejudice to a suit in a district court, it would be unnecessary at this stage of the proceedings to pass upon the question whether the suit is one which a court of equity could entertain. But in assuming jurisdiction of the case, the Court passes on that question. Hence it becomes necessary to state the reasons why, in the present posture of the case, the State does not state a case for relief within our original jurisdiction.
The gist of the cause of action asserted by the amended complaint is the injury visited upon the inhabitants of the State of Georgia by the alleged conspiracy among the defendant railroads to fix and maintain unlawfully excessive and discriminatory rates upon freight moving
But the inhabitants of the State who have suffered injury or who are threatened with injury by the unlawful practices alleged in the amended complaint are alone entitled to seek a legal remedy for their injury, and are the proper parties plaintiff in any suit to enforce their rights which are alleged to have been infringed. It has long been settled by the decisions of this Court that a State is without standing to maintain suit for injuries sustained by its citizens and inhabitants for which they may sue in their own behalf. New Hampshire v. Louisiana, 108 U.S. 76; Louisiana v. Texas, 176 U.S. 1; Oklahoma v. Atchison, T. & S.F.R. Co., 220 U.S. 277, 289; Oklahoma ex rel. Johnson v. Cook, supra, 395-396; Jones ex rel. Louisiana v. Bowles, 322 U.S. 707. And many years ago it was established by decisions of this Court, whose authority has remained unimpaired until discarded by the opinion of the Court just announced, that a State does not stand in such relation to its citizens and inhabitants as to enable it to maintain an original suit in this Court to protect them by injunction from injuries to the State's economy resulting from the maintenance of unlawful interstate freight rates. Oklahoma v. Atchison, T. & S.F.R. Co., supra; cf. Oklahoma v. Gulf, C. & S.F.R. Co., 220 U.S. 290, 301.
In the Atchison Railway case the plaintiff State alleged as the basis for its capacity to sue for relief, see 220 U.S. at 283-284, as does Georgia here, that the maintenance of the unlawful structure of freight rates on commodities widely used by inhabitants of the State was "`a menace
The federal government is parens patriae with respect of the cause of action here alleged, and not the State. The federal government alone stands in such relationship to the citizens and inhabitants of the United States, as to permit the bringing of suit in their behalf, to protect them from the violation of federal laws relating to interstate commerce. See Massachusetts v. Mellon, 262 U.S. 447, 485-486; Florida v. Mellon, 273 U.S. 12, 18; Jones ex rel. Louisiana v. Bowles, supra. The Sherman Act, §§ 1-4, 15 U.S.C. §§ 1-4, recognized that it is the United States which is parens patriae, when it authorized the United States, not the individual States, to bring criminal prosecutions or suits for injunctions under the Act.
When the United States brings such a suit it is acting on behalf of the people of the United States, and in the national interest. The authority to bring such suits includes the discretionary authority not to bring them, if the responsible officers of the government are of the opinion that a suit is not warranted or would be of disservice to the national interest. To permit a State to bring a Sherman Act suit in behalf of the public is to fly in the face of the national policy established by Congress that the federal government should determine when such a suit is to be brought and how it should be prosecuted.
Thus the Sherman Act entrusted to the national government the duty to represent the people in the vindication of their rights under the antitrust laws. And this is confirmed by § 16 of the Clayton Act, which permits injunction suits by the United States against common carriers in respect of matters within the province of the Interstate Commerce Commission, while prohibiting such suits to all others, including a State.
But even if, as the Court decides, Georgia has standing to maintain this suit, either in its own right or as parens patriae, and this Court has jurisdiction of the suit and should, in the exercise of its discretion, entertain it rather than remit the parties to the district court, the more important question remains whether the present suit is one in which a court of equity can give any effective relief.
The suit, so far as the Court allows its prosecution, is in equity to restrain an alleged conspiracy by the defendant rail carriers to fix and maintain unjust, unlawful, excessive, and discriminatory freight rates in violation of the antitrust laws. Section 16 of the Clayton Act, 15 U.S.C. § 26, authorizes "any person" to maintain a suit to restrain violations of the antitrust laws, and the State of Georgia, suing for its own injuries, is a person within the meaning of that section. Georgia v. Evans, 316 U.S. 159. The section provides that the relief to be given is an injunction "against threatened loss or damage by a violation of the antitrust laws, . . . when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity, under the rules governing such proceedings . .." And even though, as asserted, the suit be maintainable in the federal courts independently of the Clayton Act, the controlling principles governing the maintenance of the suit are the same in either case. The plaintiff must show threatened injury, Vicksburg Waterworks Co. v. Vicksburg, 185 U.S. 65, 82; Paine Lumber Co. v. Neal, 244 U.S. 459, 471; Duplex Co. v. Deering, 254 U.S. 443, 464-465; compare Texas v. Florida, 306 U.S. 398, 406-412 with Massachusetts v. Missouri, supra, 15-16, for which he is without other adequate remedy, Matthews v. Rodgers, 284 U.S. 521, 525-526, and cases cited; Schoenthal v. Irving Trust Co., 287 U.S. 92, 94; Myers v. Bethlehem Corp., 303 U.S. 41, 50-52, and
Georgia is threatened with injury only as the alleged conspiracy will result in the defendants' charging freight rates other than those which would exist in the absence of the conspiracy. That is, Georgia is not injured unless other rates than those now in force would be charged if the alleged conspiracy were to cease. While threatened damage in that sense could be assumed in a free competitive market, freight rates are not, under the Interstate Commerce Act, arrived at by the processes of free competition. The requirements of the Act are, as we will see, that the rates be just and reasonable and that they accord with the national transportation policy; the determination, in the first instance, whether the rates conform to those standards is left by Congress to the Interstate Commerce Commission, not to the courts. And unless Georgia can show that the present rates are unlawful, or that some other rate structure, which could be substituted for that now in force, would be just and reasonable, which Georgia cannot do without prior resort to the Commission, it can not show that any other structure could lawfully exist or that any injury to it is threatened by the conspiracy.
It follows from this that the prerequisites to the maintenance of the present suit are lacking for the following reasons: First, the State has not availed itself of or exhausted the administrative remedies provided by the Interstate Commerce Act, which may afford an adequate remedy and which must in any case precede the institution of the present suit in equity. Second, the suit as now framed falls within the proviso of § 16 of the Clayton Act denying to any "person," except the United States, authority "to bring suit in equity for injunctive relief against any common carrier subject to the provisions of" the Interstate Commerce Act, "in respect of any matter subject to the regulation, supervision, or other jurisdiction of the Interstate Commerce Commission." And
First. The fact that a State may constitutionally invoke the jurisdiction of this Court in a suit brought by it against citizens of another State, does not dispense with the further requisite that if equitable relief is sought, the bill of complaint must state a cause of action cognizable in equity, of such a nature that the Court can give relief. Texas v. Florida, supra, 405. It is, as we have said, a familiar principle governing the exercise of equity jurisdiction of federal courts that equitable relief may be invoked only when the plaintiff is without other adequate remedy. And it is a corollary of this that a suitor may not seek such relief until he has exhausted his available administrative remedies. Myers v. Bethlehem Corp., supra, 51, n. 9, and cases cited; Natural Gas Co. v. Slattery, 302 U.S. 300, 310-311.
Here, by the terms of § 16 of the Clayton Act, as well as the principles generally governing equitable relief in the federal courts, the State, in order to secure the aid of equity, must show injury caused or threatened by the alleged unlawful acts of which it complains. Since the wrongful acts relied upon are a conspiracy to adopt and maintain unjust, unlawful, excessive or discriminatory freight rates, the only threatened injury to the State or its inhabitants, resulting from the conspiracy, is that which is or may be caused by such unlawful rates.
But the Interstate Commerce Act requires all interstate rail carriers, before putting into effect rates or charges for interstate transportation to adopt and file with the Commission just and reasonable rates. §§ 1 (4) (5) (6), 6 (1) (3), 49 U.S.C. §§ 1 (4) (5) (6), 6 (1) (3). It confers on
The Commission is directed to consider the effect of rates on the movement of traffic, and the need of adequate and efficient railway transportation service at low cost, as well as the carriers' need of revenues sufficient to enable them to provide that service. Interstate Commerce Act, as amended, § 15a, 49 U.S.C. § 15a. In fixing rates or divisions, the Commission's determination may take account of the financial needs of the weaker carriers, by giving them a larger share of divisions, or by a general rate increase.
The Commission's orders are enforceable by injunctions in the district courts. § 16 (12), 49 U.S.C. § 16 (12). And the administrative remedy is exclusive of any which may be afforded by courts, at least until the Commission has passed upon the validity of the rates and classifications involved. Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426; Robinson v. Baltimore & Ohio R. Co., 222 U.S. 506; Northern Pacific R. Co. v. Solum, 247 U.S. 477; Director General of Railroads v. Viscose Co., 254 U.S. 498; Midland Valley R. Co. v. Barkley, 276 U.S. 482. Until the Commission acts, no court can say that the rates are not lawful and reasonable or that they are not within the lowest range of the zone of reasonableness. Nor can either be assumed, the burden being upon Georgia to show that it is injured by the acts of which it complains. And if the present rates are at the lowest point of reasonableness, as they well may be, Georgia is not injured, for in that event no lower rates
It is not without pertinence to the present application that the State of Georgia and seven other southern States are parties to proceedings now pending before the Interstate Commerce Commission, Docket No. 28300, Class Rate Investigation, and Docket No. 28310, Consolidated Freight Classification, in which the Chairman of the Georgia Public Service Commission has appeared as the principal witness on behalf of the State. In these proceedings the witness urged uniformity of rates in southern and official classification territories, in conformity to the official territory system of rates. The witness relied on § 3 (1) of the Act, 49 U.S.C. § 3 (1), making it unlawful for any rail carrier to make or give undue or unreasonable preferences or advantage to any particular person, locality or particular description of traffic; on § 1 (4) (5) (6), 49 U.S.C. § 1 (4) (5) (6), requiring common carriers by rail to establish just and reasonable rates, fares, charges and classifications; and on § 5 (b) of the Transportation Act of 1940, which requires the Commission to investigate the lawfulness of rates between points in different classification territories and to enter such orders as may be appropriate for the removal "of any unlawfulness which may be found to exist."
It is plain that the Commission has jurisdiction in these proceedings to set aside such unlawful rates as may have resulted from the conspiracies alleged in the State's amended complaint. If the Commission orders them set aside, nothing further remains for any court to do, for reasons which will presently more fully appear, save only as it may be asked to review or enforce the Commission's order. Without prior resort to the Commission, Georgia does not and cannot establish in a court proceeding that it is threatened with injury by the conspiracy or that it
The State seeks to avoid these plain provisions of the Clayton and Interstate Commerce Acts by its insistence that by its amended complaint it asks relief not from the unlawful rates which have been or will be established as a result of the alleged conspiracy, but from the conspiracy itself, over which the Interstate Commerce Commission is said to have no jurisdiction, and from which it can give no relief. In the State's bill of complaint, as originally presented, it sought an injunction setting aside the unlawful rates. Evidently realizing that all courts are precluded from taking such action before the Commission has determined the validity of the rates, the State sought to overcome the difficulty by an amendment to its bill of complaint, purporting to withdraw its attack on the rates and assailing the conspiracy alone. But, as the Court seems to recognize, even the amended complaint contains allegations and raises issues as to whether the rates charged by the defendants are discriminatory. The complaint therefore raises questions as to interference with the primary jurisdiction of the Interstate Commerce Commission which are essentially the same as those presented by the original bill.
This verbal maneuver, as a means of conferring jurisdiction on this Court, is futile, for the reason, as we have said, that the State cannot maintain its suit in equity either under § 16 of the Clayton Act or upon general equity principles, without establishing a threatened injury to it or those whom it represents. And this is equally true whether it sues as parens patriae or as owner of a railroad, and a shipper and consignee of freight. The threatened injury can ensue only from the maintenance of the unlawful rates and practices, which are specially charged to be discriminatory. But "a rate is not necessarily illegal because
We assume for present purposes that a conspiracy to fix lawful rates may be a violation of the antitrust laws, as was intimated in the Keogh case. But as this Court there pointed out, pages 161-162, the remedy is not to be had by the suit of a private individual; "the Government may have redress by criminal proceedings under § 3, by injunction under 4, and by forfeiture under § 6." The State cannot, more than a private individual, bring a suit under the Clayton Act to restrain the conspiracy unless it be a conspiracy to do something injurious to the plaintiff. The only such injury alleged in a great variety of ways is that caused by unlawful and discriminatory freight rates established by the conspiracy. No such injury can be presumed from a conspiracy to fix lawful rates or to fix any rate unless it can be known with what new rates those now in force will be replaced by Commission action.
For this and like reasons, this Court has uniformly refused to permit a party under guise of suing under the antitrust laws, to seek in the courts by indirection, determinations which are reserved for the Commission in the first instance. Keogh v. Chicago & Northwestern R. Co., supra; Central Transfer Co. v. Terminal Railroad Assn., 288 U.S. 469, 476; Terminal Warehouse Co. v. Pennsylvania
Second. Independent of, but supplementing the considerations which indicate the unmistakable intention of Congress that a suit like the present should not be made the means of breaking down the regulatory powers of the Commission, are the provisions of § 16 of the Clayton Act. As already noted, a proviso to the section withholds from "any person" other than the United States the right "to bring suit in equity for injunctive relief against any common carrier subject to the provisions of" the Interstate Commerce Act "in respect of any matter subject to the regulation, supervision, or other jurisdiction of the Interstate Commerce Commission."
When the Clayton Act was adopted in 1914, the Commission had already been given broad powers to fix and regulate rates by the Hepburn Act of June 29, 1906, c. 3591, 34 Stat. 584, and the Mann-Elkins Act of June 18, 1910, c. 309, 36 Stat. 539. Congress realized the danger that indiscriminate suits for injunctions under the
The statutory command can no more be evaded than may the exclusive jurisdiction of the Commission to regulate rates, by saying that the "relief" which Georgia seeks is not a matter subject to the jurisdiction of the Commission. Section 16 does not foreclose a suit merely where the "relief" is a matter subject to the jurisdiction of the Commission. Its words are much broader. They deny the remedy, except to the United States, "in respect of any matter subject to . . . the jurisdiction" of the Commission. As we have said, Georgia cannot show damage save by showing that the Commission would approve some rate structure other than that presently existing. That is certainly a "matter subject to the . . . jurisdiction" of the Commission, sufficient to preclude a suit under § 16.
The inseparability of equitable relief against a rate-making conspiracy from that against the unlawfulness of the rates which are or may be its fruits, has already been pointed out. Suffice it to say here that precisely the argument now made for disregarding the prohibition of § 16 was rejected by this Court in a suit brought by an injured
In the Central Transfer Co. case it was urged that § 16 of the Clayton Act did not preclude the relief sought, since the Commission did not have jurisdiction over the agreements or contracts complained of, but only over the acts involved in their performance. This Court gave the conclusive answer which we think should be given now, that no injunction could be effectively given against the agreement or conspiracy without in some manner relating it to the lawfulness of the acts done or to be done in execution of the agreement or contract, and that the determination of the lawfulness of those acts and their regulation were within the exclusive jurisdiction of the administrative agency. In that case, as well as in the United States Navigation Co. case, it was pointed out that any other construction would defeat the plain purpose of § 16 to preclude, except in suits by the Government, judicial interference with or prejudgment of the lawfulness of matters which Congress has indubitably placed within the jurisdiction of the administrative agency.
Equitable relief under § 16 in the present case must be denied upon the principle identical with that upon which the Court has relied in denying the right of the State to recover damages in the suit which it proposes here. The fact that in this branch of the case, as in Keogh v. Chicago & Northwestern R. Co., supra, and Terminal Warehouse Co. v. Pennsylvania R. Co., supra, the suit is for damages
Congress did not see fit by its extensive revision of the Interstate Commerce Act in the Transportation Act of 1940, to alter the application of the Clayton Act to the jurisdiction of the Interstate Commerce Commission. For us to alter it now to meet the exigencies of a particular case, which presents no plausible relevant differences from those which we have heretofore decided, is an assumption of power which only Congress could rightly exercise, and a power which it has plainly declined to exercise.
Third. Even assuming, as the State does, and as the Court is persuaded, that a court of equity could be called upon to enjoin a conspiracy to establish rates in anticipation of a determination of their unlawfulness, it would plainly be impossible to frame a decree for relief in advance of a determination by the Commission that the present rates are unlawful, or that those resulting from the decree would be lawful. Courts cannot enjoin, in general terms, violations of the Sherman Act, without specifying what acts are to be enjoined as violations, or as aiding or inducing violations. Swift & Co. v. United States, 196 U.S. 375, 396; Swift & Co. v. United States, 276 U.S. 311, 328; cf. New York, N.H. & H.R. Co. v. Interstate Commerce Comm'n, 200 U.S. 361, 404; Labor Board v. Express Publishing Co., 312 U.S. 426. Nor can it determine in advance what rates may be lawfully established since the jurisdiction to make that determination is reserved exclusively to the Commission.
It is futile to attempt to enjoin a conspiracy to fix rates because of their injurious effect on the plaintiff, unless it is known that they are unlawful or will be and unless the Court is free to determine the point. And it is futile for this Court to attempt to prescribe what rates will be lawful since its determination will not be binding upon the Commission, and may be ignored by it. Indeed, even after the Commission has made such a determination this Court, in the first instance, is without power to set it aside, North Dakota v. Chicago & Northwestern R. Co., supra; Texas v. Interstate Commerce Comm'n, 258 U.S. 158, 164-165, for exclusive jurisdiction to set aside an order of the Commission is vested in a district court of three judges under the Urgent Deficiencies Act, c. 32, 38 Stat. 219, as amended, 28 U.S.C. §§ 41 (28), 43.
It is the duty of this Court to dismiss an original suit in which it cannot make an effective decree. See Arizona v. California, 298 U.S. 558, 572, and cases cited. A fortiori, it is its duty not to entertain such a suit.
The soundness and the compelling necessity for the construction which the Court has hitherto given to § 16 of the Clayton Act could not be better illustrated and emphasized
Only Georgia would secure relief approximating that sought by the bill. If relief enjoining the conspiracy complained of were effective to relieve the State of the injury from unlawful rates to which it objects, and without which it could not maintain the suit under § 16, the decree must result in a new rate structure applicable to the railroads which are parties defendant. Prejudice and discrimination would be created as to every other State in southern territory and as to shippers and consignees of freight in those States who would still be governed by the published tariff rates, against which only Georgia and its citizens would have secured some measure of relief. There would be two sets of rates between the south and the north, one, effected as a result of this Court's decree, applicable to shippers in Georgia over the railroads which are defendants here, and another governed by published tariffs approved by the Commission and applicable to all other shippers and railroads in the south. Since illegality in existing rates is averred because of disparity in the level of rates in two rate-making areas, with no allegation that southern carriers receive more than a fair charge for their transportation service, the Court would be required to determine whether the discrimination should be removed by increasing rates in official territory or establishing an intermediate level of new rates, Interstate Commerce
If all this is to be avoided by the injunction against the alleged conspiracy, but without enjoining any of its asserted evil consequences in rate making, the issue originally tendered would, by the amendment to the bill of complaint, seem to amount to little if anything more than a political issue. The amended complaint alleges that "The wrong done transcends that experienced by individuals. For as men, firms, and corporations have come and gone, the conspiracy has continued over the decades." While trial upon the original complaint might have reduced this grievance to the dimensions of a cause of action to enjoin illegal freight rates injurious to the State, it now appears as the grievance of a section of the country against an existing federal system of rate making, which should be addressed to Congress rather than to this Court.
The support which the Department of Justice lends to Georgia's contentions by the brief amicus, filed in this Court in behalf of the United States, removes any evident need for entertaining this suit. The Government is charged with the enforcement of the antitrust laws, and is authorized by § 4 of the Sherman Act and § 16 of the Clayton Act to maintain suits for that purpose, which others cannot bring. If it believes that the alleged conspiracy exists and should be stopped by the remedial action of courts, without resort to the Commission, there would seem to be no reason why, avoiding the many technical obstacles to the present suit, it should not proceed to remedy in the usual manner the grievances of the citizens of the United States including citizens of Georgia.
The reasoning of the Court is not and cannot be restricted to this case. If Georgia may prosecute the present suit, every shipper or consignee of freight who asserts injury by a conspiracy respecting railroad rates in violation of the antitrust laws may maintain a like suit in a district court. The prosecution of such suits cannot fail to bring chaos into the field of interstate rate making. The entry of decrees for the plaintiffs could only mean the breakdown of the unified system of fixing rates by Commission action, which Congress has ordained by the Interstate Commerce Act. It was the purpose of § 16 of the Clayton Act to preclude such a breakdown. Its purpose can and should be effected by the refusal of this Court to entertain the proposed suit.
FootNotes
"The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of sections 1-7 and 15 of this title; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises."
Sec. 5 reads:
"Whenever it shall appear to the court before which any proceeding under section 4 of this title may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpoenas to that end may be served in any district by the marshal thereof."
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